Singapore Exchange to introduce circuit breakers next month

The Singapore Exchange (SGX) will begin using circuit breakers in the securities markets starting Feb 24, after a sudden plunge in the shares of three listed companies wiped out $8 billion in value last October.

These trading curbs are aimed at reducing wild swings in stock prices. They will kick in to limit trading in a particular stock for a period of time if it has surged or dropped substantially in value.

Describing the move as an "additional market safeguard", the SGX said the circuit breakers will initially apply to all securities priced at 50 cents and above, as well as all stocks on the Straits Times Index and MSCI Singapore Index.

This will include stapled securities, funds, exchange traded funds, exchange traded notes and extended settlement contracts, Southeast Asia's largest bourse said in a statement on Wednesday.